by Bill O’Grady and Thomas Wash
[Posted: 9:30 AM EST]
Looking for something to read? In our travels we are often asked about books we recommend. As a result, we have created The Reading List. The list is a group of books, separated by category, that we believe are interesting and insightful. Each book on the list has an associated review to help you decide if you want to read it. We will be adding to the list over time. Books marked with a “*” are ones we consider classics and come highly recommended.
Financial markets are very quiet in front of Chair Powell’s testimony before the House Financial Services Committee. Here are the news items we are watching:
Powell’s formal comments: A quick reading of Chair Powell’s first formal testimony indicates that the Fed sees the economy as strong and inflation remains under control, although some of the low readings are due to transitory factors. Thus, gradual rate increases are to be expected. Although we have seen a mild uptick in rates since the release of his comments, in reality, nothing here is a shock. Oral testimony begins at 10:00 EST. While we expect Powell to conduct himself in a professional manner, since he is new to the role, there is always a chance of fireworks.
Military shakeup in Saudi Arabia: The Kingdom of Saudi Arabia (KSA) fired its top military commanders, including the chief of staff and the heads of the air force and ground forces. We suspect two reasons for the move. First, the war in Yemen is going badly and new leadership is probably needed. Second, the crown prince, who is essentially the de facto leader of the KSA, is likely promoting his own loyalists to these positions. Having the loyalty of the armed forces is a necessary component of political stability.